About Me

I was born in march 1968 in a small village in Hertfordshire, just north of London. My father
was English (English father Irish mother) and my mother is Welsh.
When I was 2 months old the family moved to the Lebanon. I had some very good times there.
We left due to the war in a convoy that was miles long and travelled by road from Beirut to
Damascus in an 8 hour journey on the 4th of July 1976.
Since then i have lived in Croydon then various parts of Mid Sussex where I now live.

Monday, October 02, 2006

Will we cut taxes?

Just thought I would clear up some confusion, as some people are being deliberately confused.

We will not promise to cut taxes yet, because we do not yet know what the public finances are. Government borrowing is a bit of a concern at the moment, as it seems to be growing whilst the economy is also. We may have to start paying it back.

What we have said is that "We will share the proceeds of growth", and "We put economic stability before tax cuts".

What that means is that if the economy grows by 2.5% we won't just sit back and rake in all the tax, we will reduce the tax a bit and increase public spending a bit, which means that over a parliament both public spending and tax will drop as a percentage of GDP.

I appreciate John Redwood may appear to some to have a different position but he would not put tax cuts ahead of economic stability either. He argues that if taxes are lowered then you get higher growth, more self dependence and ultimately more money for public services. He is right.

The only debate is not so much when to reduce the tax burden, but when to start naming the taxes we will cut. The sensible answer has to be in a manifesto.

8 comments:

Well, actually I would prefer raising tax thresholds, but there you go.

On corporation tax, I here where you are coming from, but again I would prefer to cut red tape either first or at the same time, as I think that would boost tax revenues very well whilst making the corporate sector more competitive.

I confess that I completely fail to see the obsession that many Conservatives gave with Inheritance Tax . It affects such a small % of the population . IR figures for 2004/2005 show that with around 600,000 deaths only about 34,000 would be liable for Inheritance Tax . If , as it is , scope for cutting taxes is limited , there are many more worthy candidates .

Mark the reason for this perceived dislike of inheritence tax is that the rich don't pay it, becuase they can get around it, so it falls mostley on middle class people who have not planned. It then tends to be double taxation.

That said I have more of an issue with the lower tax bands, and making business more competative first. I do think that making the family home xcempt would be good at some point in the future.

I have always thought the double taxation argument a fallacy . Every tax except Income Tax is double taxation even for example VAT as they are paid out of taxed Income . The answer to the point that the rich are able to avoid IT so it falls on the middle classes ( but only 34,000 of them in 2004/2005 ) is to close the loopholes so that the rich pay it as well .

As the first £ 285,000 of Inheritance is tax free and the tax rate is 40% then the average estate inherits a minimum of £ 400,000 net after IT still a substantial sum of money unless divided into numerous siblings .